News Corp confirm intention to split company in two
News Corp has released a statement confirming that it intends to pursue the separation of its publishing and media and entertainment businesses into two distinct publicly traded companies, with the separation expected to be completed in 12 months.
The company suggests that the splitting of the businesses would ‘enhance overall shareholder value’ and allow each division to focus on and pursue distinct strategic priorities; benefit from greater financial and operational flexibility in order to compete; respond and react more quickly to technology and global market opportunities; and tailor its capital structure, and allocate and deploy resources in a manner consistent with its strategic objectives that best enhances value for its respective shareholder group.
Upon closing of the proposed transaction, Rupert Murdoch would serve as chairman of both companies and CEO of the media and entertainment company, while Chase Carey would serve as president and COO of the media and entertainment company.
Over the next several months, the company will assemble management teams and Boards of Directors for both businesses.
Rupert Murdoch said: "There is much work to be done, but our Board and I believe that this new corporate structure we are pursuing would accelerate News Corporation's businesses to grow to new heights, and enable each company and its divisions to recognize their full potential – and unlock even greater long-term shareholder value.
"News Corporation's 60-year heritage of developing world-class media brands has resulted in a large and unparalleled portfolio of diversified assets. We recognize that over the years, News Corporation's broad collection of assets have become increasingly complex. We determined that creating this new structure would simplify operations and greater align strategic priorities, enabling each company to better deliver on our commitments to consumers across the globe. I am 100 percent committed to the future of both the publishing and media and entertainment businesses and, if the Board ultimately approves a separation, I would serve as Chairman of both companies."
After receiving final approval of the Board of Directors, News Corp will convene a special shareholder meeting to consider the transaction, which is not expected to take place until the first half of 2013.